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Wisconsin Court of Appeals Rules Injured Employee is Entitled to Disability Benefits Even After Being Terminated for Cause

In Emmpak Foods, Inc. v. LIRC, the Wisconsin Court of Appeals recently upheld LIRC’s decision that an injured employee may recover disability benefits under the Worker’s Compensation Act (the “Act”) after the employee was terminated for cause.  The facts in the case were fairly straightforward.  The employee was an electrician who had injured his hand, and the employer, Emmpak, continued to employ him on light duty work.  Emmpak subsequently terminated the employee after he violated the same workplace safety rule a second time (working on a machine without first unplugging it).

The issue was whether the employee was entitled to disability benefits from the date of his termination until he reached his healing plateau.  Under the Act, liability for worker’s compensation generally exists where an employee subject to the Act suffers a covered injury and sustains a wage loss.  There is no requirement in the statutory language that the wage loss must be due to the injury, and in Emmpak, the appeals court held that “[t]he Worker’s Compensation Act contains no exception to liability for an injured employee who is subsequently terminated, even for good cause.”  Therefore, the court held that the employee was entitled to benefits even though it was undisputed he was terminated for good cause.

The Act was recently amended to foreclose benefits to employees in certain situations.  However, even if the current version of the statutes was in effect when the employee in Emmpak was terminated, the result would have been the same.  The statutes now provide that the employer is not liable for temporary disability if it offers suitable work to the injured employee that the employee refuses without reasonable cause; if the employee is suspended or terminated in connection with the commission of a crime for which the employee has been charged and the circumstances of which are substantially related to the employment; or if the employee is terminated for violation of a written and regularly enforced drug policy.  Wis. Stat. § 102.43(9) (2005-2006).

Emmpak Foods, Inc. v. LIRC was filed on June 6, 2007 and has been recommended for publication in the official reports.

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